Middle East and North Africa lubricants market is gaining traction from the booming automotive and petrochemical industries

Lubricants are
used in any machine that involves movement of metals and materials that are
susceptible to friction, which causes a decline in the performance. The
propitious automotive and petrochemical industries in Middle East and North
Africa are mega end-use sectors that are creating a demand influx in the
lubricants market of various countries such as Iran, Saudi Arabia, Morocco, and
Turkey. Lubricants are also found to reduce CO2 emissions by vehicles, and
therefore, these additives are gaining more traction in countries of Middle
East and North Africa. Other factors that are attributable to the growth of the
Middle East and North Africa lubricants market is the growth prospects in the marine
and chemical industries. The machines used in chemical industries are highly
vulnerable to performance losses due to friction and also undergo corrosion,
which requires lubricants. Furthermore, the pharmaceutical industry that
utilizes a substantial amount of machines is undergoing a transition in Middle
East and North Africa, which is also supporting the lubricants market vendors. With
aerospace industry soaring high in the region, the Middle East and North Africa
lubricants market is going to gain further traction. As of 2018, the middle east and north africa lubricants market size was evaluated at $17.2 billion.
Moreover, the demand for lubricants in Middle East and North Africa is poised
to grow at a CAGR of around 4% during the forecast period 2019-2025.

The Import Data Analysis of the
Middle East Lubricants Market –

The growth of
the Middle East lubricants market can be fathomed by analyzing the data of the parent
industry, which petroleum oils and oils obtained from bituminous minerals. The
following table summarizes the import value and growth rate in the parent industry,
which also reflects the growth prospects in the Middle East lubricants market –

Table
1:

The
Middle East Import Data Analysis of the Parent Industry of Lubricants Market

Sr. No.

Country

Import Value

(In USD)

Growth Rate in
% (2017-18)

1

Oman

1.70 Billion

3

2

Saudi Arabia

2.88
Billion

8

3

Turkey

12.69 Billion

29

4

UAE

9.86 Billion

22

5

Iraq

1.17 Billion

340

6

Qatar

393.48 Million

37

7

Jordan

1.49 Billion

38

8

Kuwait

39.28
Million

3

9

Iran

266.81 Million

-45

Trade Data –
International Trade Centre

Clearly, the
parent industry of the Middle East lubricants market is booming, and it is
evident in the profitable growth rate that was witnessed between 2017 and 2018.
A significant part of these figures are attributable to the growing Middle East
lubricants market size. Even though the parent industry had witnessed a decline
in Iran, the lubricants market is poised to gain traction in the future due to
the growth of the Iran automotive industry, which is on a path to progress.

The expansion
of the Middle East lubricants market is attributable to the growth prospects in
the end-use industries such as automotive, aviation, marine, and manufacturing industries
that include petrochemical, chemical, pharmaceutical, and others. The Middle
East had the greatest lubricants market share with 53% in 2018, and it is predominantly
attributable to the following factors –

The Organization of Petroleum Exporting Countries (OPEC) has come up with
the findings that Saudi Arabia boasts of crude oil production that translates
to 103.17 million barrels per day. The production of petroleum and related products entails a gamut of machinery
and equipment, which are required to be maintained with proper lubrication in
order to avoid the performance issues. The enormous production of crude oil in Saudi
Arabia significantly creates growth prospects for the Middle East lubricants
market players.

Turkey chemical industry has been booming for years with around 62
thousand companies manufacturing chemicals across the country. In 2017, the
chemical industry had played a vital role in the total industrial exports, and
the exports of chemicals was valued at $16.8 billion, according to the Ministry
of Economics, Republic of Turkey. This is attributable to the on-going manufacturing activities in multifarious chemical
industries, which requires a lot of operations that include various machines which
need intermittent lubrication for maintenance. The flourishing chemical
industry in Turkey is creating revenue avenues for the vendors in the Middle
East lubricants market.

· The Chemical Sector in UAE and Kuwait: A Profitable
Marketplace for Lubricants

The chemical industry in UAE and Kuwait have a major contribution towards
the GDPs of both the countries. According to the latest findings by the Gulf
Petrochemicals and Chemicals Association (GPCA), the chemical sector in UAE and
Kuwait is the second largest contributor to the manufacturing with a share of
24% and 19% respectively, which is to say that the chemical industries in these
countries are witnessing a demand upsurge. Therefore, there is a surge in the manufacturing activities, which is creating
a sustainable marketplace for the Middle East industrial lubricants market
vendors.

·The Iran Automotive Industry: A Propitious
Lubricants Marketplace –

According to the United Nations Educational Scientific and Cultural Organization
(UNESCO), Iran’s automotive industry is an attractive marketplace for
investors. It is the biggest industry in Iran after oil & gas with 10%
contribution to the country’s GDP. In 2017, 1.51 million vehicles were manufactured in Iran with a year on year
production growth of 18.19, according to OICA. The organization also notes that the industry saw a decline of 40% with 1.06
million vehicles manufactured in 2018. However, Iran has a substantial number of cars on the road, which require
lubrication. This has been driving the lubricants market in the country. Furthermore,
the upcoming years are expected to witness more investment in the Iran
automotive industry, which will create revenue sources for the vendors in the
Middle East lubricants market.

·The Demand Influx in the Middle East Lubricants Market
from the Aviation Industry –

According to the International Air Transport Association (IATA), the
Middle East aviation industry will be growing at a CAGR of 4.4% with an
addition of 290 million passengers by 2037. This indicates that the aviation industry in the region is going to prosper
propitiously, and this industry is a hefty consumer of aviation lubricants.
Therefore, the growth of the aviation industry in the region will create a stir
in the Middle East lubricants market.

·The Maritime Industry in Middle East Poised to
Create Growth Avenue in the Lubricants Market –

May 2017 had witnessed a merger of Hapag-Lloyd and the United Arab
Shipping Company. This was attributed to the increased freight volumes.
Hapag-Lloyd had reported a rise in revenues succeeding the merger with the
shipping company. This is the evidence of the growth of shipping industry in
the Middle East. Now, ships are maintained with lubrication for smooth
operations and performance. The growth of the maritime industry in the region
in creating a tangible demand influx in the Middle East marine lubricants
market.

Apart from
these factors, the ever-flourishing chemical and petrochemical industries in
Qatar, Oman, Jordan, and Iraq are contributing to the Middle East lubricants
market revenues. Furthermore, the automotive industry is poised to grow across
the globe, and the Middle East will have a substantial share in the growing
market of electric
vehicles, semi-autonomous
and autonomous vehicles, and self-driving
cars and trucks, which will further impact the Middle East lubricants
market growth.

The Import Data Analysis of the North
African Market –

The following
is the trade data of the parent industry of lubricants market in North Africa
evaluated by ITC –

Table
2:

The
North Africa Import Data Analysis of the Parent Industry of Lubricants Market

Sr. No.

Country

Import Value

(In USD)

Growth Rate in
% (2017-18)

1

Algeria

2.45 Billion

82

2

Egypt

7.06
Billion

27

3

Libya

2.11 Billion

36

4

Morocco

5.76
Billion

25

5

Sudan

56.22 Million

108

6

Tunisia

2.64 Billion

49

Trade Data –
International Trade Centre

Conspicuously,
the trade trend in the parent industry show a tangible appreciation over the
course of a year. This is partly attributable to the demand for lubricants from
various end-use industries in these countries, which is creating opportunities
for the vendors in the North Africa lubricants market.

The growth
prospects in the North Africa lubricants market is attributable to the revenue
sources majorly generated by the automotive and petrochemical industry in
various countries of the region. Here are some factors that are directly
impacting the North Africa lubricants market growth –

According to the International Organization of Motor Vehicle
Manufacturers (OICA), Egypt had observed a vehicle production growth of a staggering
95% in 2018. This growth is
attributable to a gamut of investments by automobile companies in Egypt. For
instance, in January 2018, the German manufacturer Mercedes-Benz announced an inauguration
of a vehicle assembly plant in Turkey. The Local Industry Development Strategy
(LIDS) of Turkish government is supporting the vehicle production industry, and
the upcoming years are poised witness more investments, which will create a
stir in the automotive lubricants market.

·The Increasing Import of Vehicles and Thriving
Petrochemical Industry in Libya to Spur the North Africa Lubricants Market –

According to ITC, the import value of vehicles in Libya was valued to be
$630.72 million in 2018, and it had witnessed increment of an impressive 108% year
on year. Even though Libya’s
economy is seemingly non-profitable, but the country is making a prospective
progress. It is quite evident in the findings by the World Bank, according to
which the GDP of Libya had grown from $26.222 billion in 2016 to $38.108
billion in 2017. The upcoming years are
poised to witness a tangible economic progress, and the automotive industry
will make further progress, which will support the North Africa lubricants
market.

Additionally, the petrochemical industry contributes significantly to the
country’s economy. With an augmented demand for petroleum products in the
upcoming years, the industry is going to witness enhanced production which will
again require lubricating oil for machinery. This is going to play a vital role
in North Africa lubricants market growth.

· Sudan and South Sudan’s Oil & Gas Industry
Contributing to the Increasing Revenues of the North Africa Industrial Lubricants
Market –

According to the U.S. Energy Information Administration, Sudan and South
Sudan produce over 200,000 and 150,000 barrels of crude oil per day. The machinery used in the refineries of both the countries require lubrication,
which creates a profitable lubricants marketplace in the countries.

The International Trade Association (ITA) has assessed that the total
number of passenger cars in circulation is around 2 million in Tunisia. Furthermore,
the organization has evaluated that the sales of new passenger cars and pickup
trucks was 63,685 in 2017, and the figure witnessed a 5% increase year on year. Now, with the growing number of passenger cars and trucks on the roads of
Tunisia, the North Africa lubricants market is surely going to gain traction
during the forecast period.

The
aforementioned factors will be driving the lubricants market in North Africa
and Middle East, and the growth will not be limited to the industrial
lubricants and synthetic
lubricants. The marine
lubricants and aviation
lubricants markets will also gain traction from the respective end-use
industries. On the basis of the type of lubricants, industrial oil and process
oil will get the maximum traction, and their application in Middle East and
North Africa will grow at a CAGR of 4.5% through to 2025.

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